IMF forecasts on global decline improved, but still certain

In its recent World Economic Outlook, the International Monetary Fund estimated that the global economy will shrink by 4.4 percent this year, an improvement from the previously forecast 5.2 percent decline. China, however, is expected to grow by 1.9 percent this year, on the back of strong export sales and a drastic reduction in COVID-19 cases, allowing numerous economic activities such as domestic tourism and retail sectors to successfully reopen. Other major global economies are still grappling with efforts to contain the virus, relying on lockdown measures or vaccines to enable the full reopening of their economies.

Key Economic Indicators 

The consumer price index (CPI) rose by 1.7 percent year-on-year (y-o-y) in September 2020, lower than August’s 2.4 percent increase. The producer price index (PPI) fell by 2.1 percent y-o-y, following a 2 percent decline in August. Pork prices rose by 25.5 percent, lower than the 52.6 percent gain in the previous month. China’s CPI is expected to fall below 1 percent in the final quarter of this year, challenging the successful recovery of the middle kingdom’s post pandemic economic growth efforts.

PMI expands on back of strong exports and infrastructure investment

China’s official purchasing manager’s index (PMI) rose in September to 51.5, up from a reading of 51 in August. Manufacturing continued at a high pace leading up to China’s weeklong national holiday in the beginning of October. Infrastructure development has resulted in prices of iron ore hitting multi year highs, with stimulus led investment increasing in this sector. This, as well as strong exports, has led to continued expansion for manufacturing despite delays felt earlier this year.

128th Canton Fair held online

The China Import and Export Fair, otherwise known as the Canton Fair, was held online this year. This was its 128th iteration and the first time it takes place online since the event’s conception in 1957. The event was held from October 15 to 24, with 26,000 exhibitors showcasing close to 2.4 million products from 16 categories. The fair introduced 120 live streams from leading Chinese companies, with the platform also including support for suppliers and buyers such as support with logistics and customs. This adds to the growing number of international events taking place online, potentially paving the way for the continuation of this trend in a post-COVID-19 future.

 

 

This article is produced by Axis Group and is published in The Econometer section of ChinAfrica magazine (October 2020), an English and French language monthly publication that provides news, views and analysis on all things China, Africa and China-Africa relations.

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